Yes! you have read right that on the 1st July 2020 mutual fund, investors will have to pay stamp duty. This will affect the returns received by the investors. After investing in mutual funds, stamp duty will be levied at the rate of 0.005% at the time of allotment of the unit and 0.015% at the time of transfer of mutual units. It will also be installed on the stamp duty systematic investment plan, i.e., SIP and systematic transfer plan, i.e., STP. However, when investors are going to encash their mutual fund unit, it does not have to pay stamp duty when they withdraw their money from mutual funds.
What funds will have more impact on stamp duty?
This stamp duty will be levied on all mutual funds. Whether it is a debt fund or an equity fund. However, it will have a greater impact on debt funds in which investors generally invest for a short period of time. Stamp duty @ 0.005% on the purchase of switch-in account or mutual funds is required to be paid. If you transfer mutual fund units from one Demat account to another Demat account, you will have to pay stamp duty @ 0.015%. This will have the highest impact on short-term investment, especially investments of 90 days or less.
The exercise of imposing stamp duty started in January:
The stamp duty on mutual funds was to be levied from January, which was first postponed till April and then till July. Stamp duty will be levied on the purchase of all kinds of mutual funds, including lumpy purchases, SIP, STP, and reinvestment of dividends. In case of reinvestment of dividend or dividend investment, stamp duty will be levied on dividend on the source tax deduction, i.e.
How much will it affect?
Suppose you invest Rs 1 lakh in the debt fund, and you get Rs. 5,000 at the end of the year according to a return of 5%. You have to pay Rs. 5, stamp duty. If you get a return of Rs. 418 in a month, this amount will be Rs. 5, but if you keep the amount invested for three months, the same amount will be less than that of the return.
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